Let's review that Paradox of Thrift thing again

Federal expenditures (blue) and personal saving (red)

Economists are so proud to have identified this idea that consumer save during hard times, and therefore make things worse.   Look closely and lets see if consumers began saving or politicians began spending.  Personal savings went up a bit, then declined, returning to $400 billion after a five year run at about $200 billion.  Note that leading into the recession, savings rates were declining.

Federal expenditures, on the other hand, went up, then up, then up and up.  Federal expenses are now $800 billion a year above what they were during the five year period prior to the crash.

I see no Paradox of Thrift. I see a cute little term that is supposed to justify over 4 times the rise in federal spending than anything matched by consumer savings.  Most of that consumer savings, by the way, went toward a 30% reduction in oil imports, a good result, a result that would have lead out of the recession.  The government expansion of $800 billion/yr, on the other hand seemed awfully correlated with the sudden 20% jump in oil imports, a very bad result that led to the second dip.

So we have Congress burning more OPEC oil, more  inefficiently and Keynesians blame the consumer for saving $200 billion a year.